Conduction Mechanism of Medical Service with Environmental Factors: A Nonparametric Approach

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Reasonable adjustment of medical service price is of critical importance and remains puzzled in health reform in China. Previous literatures only present qualitative suggestions or implement quantitative analysis from the perspective of price adjustment itself. Innovatively, the research establishes a conduction mechanism measurement of medical care price from the perspective of joint investigation of other environmental factors through the bridge of production efficiency in complex reform. The conduction mechanism is identified by conduction style and conduction effect with the monthly data of 16 provincial public hospitals in Zhejiang Province during 200701-201107. First, the main conduction style is labor input during 201006-201107. Second, different environment factors exert different roles on conduction style. (1) Both personal expenditures and governmental fiscal inputs promote the production efficiency of labor input, with the conduction strengths reaching 2.55% and 16.58%. (2) Running cost and health price index hardly promote the production efficiency of labor input, with conduction strengths reaching -1.33% and -1.94%. (3) Jointly, the four environmental factors exert positive impact on production efficiency of labor input overall, with conduction strength reaching 12.48%, which presents strongly evidence that government should raise medical service price so as to adjust the price distortion due to different environmental factors.